Borrowers managing mortgage payments despite cost pressures, says UK Finance

Detailed summary

Homeowner mortgage arrears fell by 10% annually in the third quarter of 2026, UK Finance

Mortgage arrears and repossessions fell annually in the third quarter of this year, according to a banking and finance industry body, despite some rising cost pressures for households.

UK Finance said 76,080 homeowner mortgages were in arrears of 2.5% or more of the outstanding balance in the third quarter of 2026, marking a 10% annual fall and a 2% decrease compared with the previous quarter.

Some 8,170 buy-to-let mortgages were also in arrears, down by 22% annually and a 3% decrease compared with the previous quarter.

Meanwhile homeowner property repossessions fell by 17% annually, reaching 1,150 and remaining at their lowest level since the fourth quarter of 2024.

Homeowner repossessions were flat compared with the previous quarter, with a 0% change recorded.

Some 690 buy-to-let repossessions were recorded, which was a 23% annual fall but a 10% increase compared with the previous quarter.

Mortgages in arrears made up 0.87% of homeowner mortgages and 0.43% of buy-to-let mortgages in the third quarter of 2026, UK Finance said.

It added that, although total repossessions increased compared with the previous quarter, from 1,780 to 1,840, repossession numbers are significantly lower than long-term peaks.

Last week, the Bank of England raised the base rate from 3.75% to 4%, in the first rise in interest rates in more than three years.

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